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Eliminating Credit Card Debt
The overwhelming task of eliminating your debts can often seem like an uphill battle. Without the knowledge and expertise of a professional on your side, unfortunately, the odds are not in your favor. In order to reduce your debt, you have several options; however, if you want to maintain a "good credit rating", you have to pay you bills on time; anything else will cause your credit score will suffer. With that being said please consider the following: Option 1 - Consumer Credit Counseling Consumer Credit Counseling companies were originally established to help credit card company's recover revenue from clients that were falling behind on their bills. Choosing to use a Consumer Credit Counseling service can have negative effects on your credit that last up to 10 years. These services are also considered Chapter 13 Bankruptcy by most lending institutions. The bottom line is that Consumer Credit Counseling companies work for the creditors and banks. By using their services, you will end up paying back your full debt, plus interest. These companies do not always provide financial relief as consumers often find out. Option 2 - Debt Consolidation Loan Borrowing from Peter to pay Paul is no way to get out of debt. It is however, the premise behind debt consolidation programs. Debt consolidation programs require that financial institutions provide consumer loans based on items of equity. For example, a home equity loan is used to "combine" your debts into a single monthly payment, which can often take 10 to 20 years to repay depending your on financial situation. This may seem like a viable solution in the short term, but missing payments on a secured loan could cause you to lose your home or the collateral you pledged. Many people who decide to go the debt consolidation route find themselves worse off than they originally were. It is not a good idea to exchange your unsecured debts for secured debts. Option 3 - File Bankruptcy While bankruptcy may seem to be the most expedient method for removing your unsecured debt, it is not, by any means, the best answer. A bankruptcy will remain on your credit record for 7-10 years and seriously affect your ability to rebuild your credit. Even after a bankruptcy has been removed from your record, you are still required to disclose it on forms and applications; even applications for employment. If you fail to answer this question truthfully it can be considered a crime. Additionally, certain types of bankruptcy can require a court-appointed trustee to control and oversee all aspects of your personal estate. Bankruptcy can have an adverse affect on your credit rating and lifestyle long after the legal matters are over. This is not a decision to be taken lightly. Bankruptcy is an option that should only be explored as an absolute last resort to solving your financial problems. Option 4 - Debt Negotiation and Settlement Programs Debt settlement programs provide their customers with a viable solution to an otherwise complex problem. By helping eliminate your current debt, Debt Settlement programs allows you to regain control over your financial affairs and allow you to become debt free within a reasonable time frame. Debt settlement is fast becoming the only true option to financial recovery! However, I will say it again, even in Debt Settlement you have to pay you bills on time; anything else will cause your credit score to suffer. Debt settlement is not a Consumer Credit Counseling Service or a consolidation loan. Debt settlement is a legitimate and legal way of solving your debt and credit problems without the need for bankruptcy. Detb Settlement programs were designed to lower your current debst by 40-60%. Traditionally, this is accomplished by negotiating approved payoff amounts with your creditors. A Debt Settlement program can typically be completed within 36 months or less and eliminate most, if not all, of your current debts. Alan Barnes
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Benefits and Drawbacks of Bankruptcy Outlined below are some of the benefits and drawbacks of bankruptcy. It should be noted that bankruptcy is not to be entered into without first having sought professional advice. Debt Elimination Is The Key to Financial Freedom If you want financial freedom, the first thing that you will need to do is to get rid of your debts. After all, as long as you owe money, you can't consider yourself to be financially free. This is due to the fact that the money you will earn in the future won't actually belong to you, as you'll have to put it toward paying off debts in the past. Bankruptcy - The Easy Option? Incredibly, since the changes in the bankruptcy law in April 2004, debtors are more likely to petition for their own bankruptcy rather than their creditors! You would think that most people who have been threatened with the prospect of being made Bankrupt would be riddled with fear of the possibility. It is more widely referred to as the "Big B" rather than the dreaded word itself. However, is this a thing of the past? Since the changes in The Enterprise Act 2002 took place in April 2004 it would appear a lot more people are inclined to petition for their own bankruptcy as a solution to their debt problems. You Can Make Financial Resolutions Anytime The New Year often brings with it a desire to right the wrongs in your life. From this desire springs the tradition of New Year resolutions. You should take advantage of this to change your financial situation. New Bankruptcy Law Will Not Protect You from Identity Theft Recently passed by Congress with overwhelming support, the oddly-named Bankruptcy Abuse Prevention and Consumer Protection Act was designed to eliminate "bankruptcy of convenience." The perceived problem is that many compulsive gamblers, shoppers and drug users often run up huge debts on easily available credit cards with no intention of paying their bills. A relatively easy bankruptcy filing through Chapter 7 of the Federal bankruptcy code wipes all the debts clean and gives the debtor a fresh start. Studies would suggest that most people who file for bankruptcy are actually suffering from sudden illness, job loss or some other catastrophic event, but the law was passed just the same, and debtors will now have to repay at least a portion of their problem debt when the new law takes place in October, 2005.A provision of the new law that was not well publicized is the fact that the law applies to any debt, including debt which has been incurred through theft of the debtor's identity. If someone steals your credit card, or driver's license, or both, and runs up a huge amount of debt by posing as you, then you will be held responsible for the debt. Identity theft has become an increasingly large problem in the last few years, but the new legislation should make everyone aware of the problem associated with identity theft. While a determined thief can probably steal anything, a few simple steps can make it harder for someone to steal your identity.:Shred your documents. There are plenty of thieves that will sort through trash, looking for credit card receipts, bills and any document that has your signature. If you are throwing away financial documents, shred them first. Shredders can be found at any office supply store for a reasonable price. Don't give out your Social Security number to anyone unless it is absolutely necessary. Congress originally intended that the Social Security number not be used as a national identity number, but over the years it has become just that. If someone with whom you are doing business asks you for your number, inquire as to whether it is absolutely necessary that they have it. Providing the number may not be required. A thief can obtain a lot of information about you if they have your Social Security number. Guard it carefully.Don't carry more credit cards with you than is necessary. It's rarely necessary to carry 20 credit cards in your purse or wallet. Go through them and see if you can't keep a few in a secure place at home.Check your credit report once a year and look for suspicious entries. It typically takes nearly a year for someone to find out that their identity has been stolen. Look out for loans or large purchases that you don't remember making. Never give out personal financial information, especially credit card numbers, to someone that you don't know on the telephone.A few simple steps, practiced regularly, can protect you from identity theft. More importantly, these steps can protect you from having to repay thousands of dollars of debt that some thief might run up in your name. Your identity is your most valuable asset. Protect it carefully. 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I have compiled some tips that you can use in order to find those extra dollars. Debt Help and Advice for the UK At some time or another during our lives most of us will overspend and get into debt. Sometimes we can get our finances back on an even keel by cutting down on a few luxuries. Debt Recovery Can be Easy OK, so you are up to your head in debt. You are stressed out, it is now affecting the way you function and absorbing most of your daily thoughts. You have no idea what to do. A Debt Elimination Process Must Be Initiated From You. The first and maybe most important step in a debt elimination process, is to acknowledge there's a problem and realize that something has to be done with your situation. Some do it before it is too late, though an asthonishing number of people seem to act as if this is not their situation at all. They know that the need to seek advice from a debt consolidator, but they do not. The paradox is that many people are willing to use many years and spend a whole lot of extra money to get out of debt. Don't do like these people. Home Equity ? Foreclosure Often Not Necessary in Current Market While driving around your community, you may have seen signs posted on telephone poles that offer "foreclosure help." These seemingly generous offers to help financially troubled homeowners who are in danger of losing their homes to foreclosure are actually scams. Typically, the "help" comes in the form of an offer to buy the home for a reduced price from the homeowner. The scammer offers to pay off the homeowner's existing debt and to rent the home back to the homeowner until they can afford to buy the home back. The scam comes after the owner signs the paperwork and the offer to rent the home to them abruptly disappears, leaving the scammer with an inexpensive house and the homeowner without a house or a place to live. Fortunately, the current booming real estate market has made it possible for financially troubled homeowners to avoid foreclosure on their home and the scammers. Eight Ways to Consolidate Debt Next to winning the lottery, a debt consolidation loan is a debtor's dream. With one monthly payment and a fixed monthly payment schedule, you can actually see an end to those monthly payments. Bankruptcy, Is It A Way Out Negotiations with creditors have failed. Repossession is imminent and foreclosure proceedings have begun. Your income is simply not sufficient to pay your bills, no matter how low the payments are. It may be time to consider bankruptcy. Eliminating Credit Card Debt The overwhelming task of eliminating your debts can often seem like an uphill battle. Without the knowledge and expertise of a professional on your side, unfortunately, the odds are not in your favor. In order to reduce your debt, you have several options; however, if you want to maintain a "good credit rating", you have to pay you bills on time; anything else will cause your credit score will suffer. With that being said please consider the following: Secrets to Why Debt Reduction is So Vital for Your Financial Health Living with debt is never a good idea if you want to make long-term financial plans. Every cent you use to service debt is money that could have been invested in your future. Investment is extremely important, and can lead to a more comfortable and secure retirement. Just as smart investment can lead to a more secure future, mismanaging your money and incurring debts can lead to financial difficulty down the track. Poor money management can prevent you from taking advantage of many different kinds of financial opportunities, and may effect your credit report. Christian Debt Consolidation ? Feel Comfortable About Managing Your Debt Many Christians feel uncomfortable with the notion of being in debt, and even more so when the debt has gotten out of control. Some say that it is not acceptable for Christians to owe any money, even for such necessities as a home. Others feel that such debts are acceptable as long as debt does not place a burden on the family's finances.In recent years, the number of debt consolidation and credit counseling firms that specialize in catering to Christian clients have increased dramatically. Christian debt consolidation and credit counseling agencies are aware of the concerns Christians have about debt. They can help you consolidate your debt, establish a repayment schedule, arrange to allow you to continue tithing, and provide the additional spiritual counseling that you may need to help you stay out of debt. All of this is done in a way that is consistent with Christian beliefs and the teachings of the Bible. Creditors recognize that people who enter a debt consolidation program are trying to repay their obligations in good faith. Creditors are more willing to extend favorable terms to such clients in the hope that they (the creditor) will avoid the significant expense of turning the account over to a collections firm or avoid an extended drawn out process if the account holder goes through the expense of declaring bankruptcy.Experienced Christian Debt consolidation and credit counseling services know this, and they have experience working with creditors to ease the burden of repayment. They can help you renegotiate loans, reshape payment schedules, reduce your interest rate or obtain a loan that consolidates your debt. Many of these firms are nonprofit; they are in the business strictly so that they can help fellow Christians to get back on their feet and free from the burden of unusually heavy debt. If this sounds like something that suits your personal needs, you should consider contacting a Christian debt consolidation or credit counseling agency.
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